Hong Kong’s Largest Virtual Bank to Enable Crypto Service for Licensed Firms
ZA Bank, Hong Kong’s largest virtual bank by assets, has unveiled its plans to offer crypto services to licensed cryptocurrency exchanges and firms in the city.
According to a Bloomberg report on Wednesday, April 12th, the chief executive officer (CEO) of the ZA Bank, Ronald Iu, in an interview, said that the Bank has already started the business with the two only licensed crypto exchanges in the city and would be expanded to more as they become regulated.
Just as the US regulators are embarking on an unprecedented ChokePoint 2.0 offense to debank crypto in the United States, Hong Kong banks are actively trying to bank crypto, to bridge fiat to crypto
The East is rising pic.twitter.com/R27YLelJRR
— Crypto熊猫 (@NoodleofBinance) April 12, 2023
ZA as Settlement Bank for City’s Exchanges
As per the report, ZA Bank will offer crypto-to-fiat conversions to clients of the city’s registered crypto exchanges. According to Ronal Iu, the Bank will act as a settlement bank to allow crypto deposits at licensed exchanges to be withdrawn in Hong Kong dollars (HK$), Chinese yuan (CNY), and United States dollars (USD).
The Bank also has plans to offer banking services to the registered crypto firms in the city by allowing them to open an account at the bank. The accounts for local crypto firms follow a trial in a regulatory sandbox where 100 firms participated.
However, CEO outlined that clients from mainland China would not be offered the service due to the country’s restrictions on crypto activities. He added that the planned business operations were already underway with HashKey and OSL, the only two currently regulated exchanges in Hong Kong. More would join them as they become licensed.
The news has come at a time when the crypto sector is under fire in the US. Government and regulatory agencies like SEC are sparing not a single day in their efforts to suffocate crypto in the country. Meanwhile, Hong Kong seeks to revive its status as a financial center following Covid and years of political turmoil, and crypto is also on its agenda.
As per reports, Hong Kong is expected to roll out a revamped virtual asset exchanges framework as of June 1st, which will allow exchange operators to open to retail investors. Furthermore, the city is currently hosting its inaugural Web 3 festival, which HashKey Group, the parent organization of one of the two registered digital asset exchange HashKey Pro, co-hosts.
Given the excellent weather for crypto in the city, many Chinese state-owned banks, as reported, are flocking toward Hong Kong in their search for crypto clients.
The Securities and Futures Commission (SFC) of Hong Kong also plans to regulate the DeFi sector. Cai Zhonghui, an SFC official at the ongoing Web 3 festival, said that decentralized exchanges (DEXs) would need to apply for a license to serve the city’s DeFi users.
He said that many DeFi projects are not decentralized, and a small number of people or officials control most of the tokens, and SFC must ignore their superficial statements to study the substantive content.
— Wu Blockchain (@WuBlockchain) April 12, 2023
According to Wu Blockchain:
“Cai Zhonghui, said that many DeFi projects are not decentralized, and a small number of people or officials control most of the tokens, and SFC must ignore their superficial statements to study the substantive content.”